Southwest Airlines has agreed to pay a $35 million fine as part of a $140 million settlement with the United States Department of Transportation (DOT). This comes after the airline was found responsible for the cancellation of almost 17,000 flights last year during the busy Christmas season, which left more than two million passengers stranded.
According to the DOT, the majority of the penalty will be used to compensate future Southwest customers who were impacted by disruptions or major delays.
US Transportation Secretary Pete Buttigieg said, "Today's action sets a new precedent and sends a clear message: if airlines fail their passengers, we will use the full extent of our authority to hold them accountable. Taking care of passengers is not just the right thing to do - it's required, and this penalty should put all airlines on notice to take every step possible to ensure that a meltdown like this never happens again."
In a statement, Southwest expressed its appreciation for the consumer-friendly resolution that allowed the airline to get credit for compensation that had already been given to passengers, as reported by Fox Business. The airline said they have taken what they need to know from this incident and can now go forward with confidence.
The Chaotic 2022 Holiday Season
In the last ten days of December 2022, Southwest grounded about 16,700 planes. Even after other airlines had recovered from the winter storm that started the breakdown, Southwest was still having trouble, in part due to an overload in their staff scheduling system.
As per DOT's findings, Southwest violated consumer protection rules by not providing sufficient customer service help, which left passengers stranded at airports and hotels, forcing them to scramble to find alternative flights and lodgings. Apparently, calls to Southwest's customer service line often resulted in long wait times or a busy signal.
According to Fox Business, Notifying consumers of their flight status in a timely manner was another area where Southwest fell short. Many passengers were unable to find out about the flight cancellations until they got to the airport since they were not given any flight information.
Southwest was also criticized by the DOT for allegedly taking too long to reimburse thousands of consumers. Some customers did not get their refunds right away for services like pet fees or deluxe boarding that were never used due to cancellations, while others had problems when submitting their claims to the website.
Along with the $35 million fine, Southwest will get $33 million as a credit toward compensation that has already been distributed, mostly for the purpose of awarding 25,000 frequent flyer points to each impacted customer.
Additionally, the business has committed to providing $90 million in vouchers to customers in the future, with the airline getting credit for $72 million of that.
